XN000022-1996-05-31 — Page 9

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The growth in total exports to China and Germany however moderated, to about 8% and 2% respectively in real terms in the first quarter, from 11% and 3% in the preceding quarter.

But the corresponding growth rates in the first two months of 1996 were much faster, both at 13% in real terms. Total exports to the United States fell by about 7% in real terms in the first quarter. There was nevertheless an increase of 1% in real terms in January and February combined.

The growth in imports likewise slowed. Imports of goods rose by about 5% in real terms in the first quarter over a year earlier, in contrast to increases of 8% in the fourth quarter of last year and of 14% for 1995 as a whole.

Underlying this was a further sharp slow-down in retained imports, to only about 1% in real terms in the first quarter, following increases of 5% in the fourth quarter of last year and of 13% for 1995 as a whole.

The visible trade deficit widened to $40 billion or 11.5% of the value of imports in the first quarter of this year, from $36 billion or 10.9% in the same quarter last year. This was mainly attributable to the particularly weak export performance in March.

The visible trade deficit in fact narrowed to $16 billion in the first two months of 1996, from $19 billion in the same period last year, and this was partly due to a smaller deterioration in the terms of trade along with the rebound in the US dollar in the latter part of last year, and partly due to a slower intake of a variety of imports for local use. The visible trade deficit similarly narrowed in April. as compared to the same month last year.

The slack consumer spending observed for nearly one and a half years seemed to be bottoming out. Both the volume of retail sales and retained imports of consumer goods showed smaller declines in the first quarter of 1996 than in the preceding quarters.

While the sales of clothing and footwear and of other consumer goods continued to show real growth in March, the sales of motor vehicles picked up to a 9% increase in volume, the first rebound since July 1994. Spending on consumer services also appeared to have risen further.

Investment spending should have attained a continued notable growth in the first quarter of 1996. Work on the major infrastructural projects was highly intensive, particularly as the Airport Core Programme progressed towards its peak.